The most volatile major stock market in the world is closer to Honolulu than to Wall Street — it’s South Korea.
Here’s one of those tales of theoretical market timing. If you would have bought shares in a fund tracking South Korea’s main stock index on Jan. 2 and sold them on June 22, you would have more than doubled your money.
But if you would have bought shares on that June day and sold them yesterday, you would have lost more than 25% of your investment.
That’s dramatic, but it’s just part of a broader story, focused on technology — and AI.
Start with the KOSPI. It’s South Korea’s main stock index — and similar to the Dow Jones, it’s weighted — meaning the stock performance of some companies have a heavier influence on the level of the entire index.
For the KOSPI, semiconductors dominate — especially the companies Samsung Electronics and SK Hynix, which together can account for half the KOSPI’s value.
When bulls were on the run for memory chips used in AI applications and data centers, the stocks soared.
More recently, a cautious tone has loosened the bears — pulling the companies’ share prices down, along with the KOSPI itself.
And while there’s debate about where the bottom of the market may be, it’s all relative.
Despite all those losses, the KOSPI is still up nearly 60% year to date.